Analog Devices earnings down from year-ago quarter

Analog Devices CEO Vincent Roche
Despite a less than stellar fourth fiscal quarter, Analog Devices CEO Vincent Roche believes the company is well-positioned to benefit from growth in trends such as 5G. (Analog Devices)

Analog Devices, Inc. posted net income of $277.69 million, or 74 cents per share, on sales of $1.44 billion in its fourth 2019 fiscal quarter ended November 2, down from $404.86 million, or $1.08 per share, on sales of $1.54 billion in the year-ago fourth fiscal quarter.  Gross margin was $942 million, down 10% from $1.04 billion a year ago.

For 2019, Analog Devices posted adjusted earnings of $5.15 per share on revenue of $6 billion. Gross margin was 70 percent.

“ADI delivered solid fourth quarter and full-year results amidst continued trade and macro uncertainty,” said Vincent Roche, President and CEO, in a statement. “Our strong margins and cash flow reflect the resiliency of our business model, which enabled us to return nearly $1.4 billion to shareholders, or over 120% of free cash flow after debt payments.”

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During a conference call with analysts, Roche said that while the industry’s move to 5G has been slower than expected, Analog Devices will start to benefit from the 5G rollout, picking up steam next year, and continues to add capabilities to its integrated receivers

Roche added that Analog Devices was continuing to invest in technologies for electric vehicles, industrial automation, and health care, with the latter benefitting from innovations in signal processing algorithms.

In addition, Analog Devices also noted during the conference call that the company would realize cost reductions in the next fiscal year from ongoing inventory reductions and recent restructuring actions, including the closure of several facilities. The actions are slated to save the company $50 million.

For the first quarter of fiscal 2020, Analog Devices projects revenue of $1.30 billion, with operating margins of approximately 23.7% and adjusted operating margins of approximately 36.7%. Adjusted earnings per share is projected to be $1.00, +/- $0.07. The company expects a stronger second fiscal quarter.

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